Conor here: This post details how Uber and Lyft are trying to crush worker action in the Twin Cities by threatening to exit Minneapolis-St. Paul altogether if they’re required to pay drivers what might amount to a living wage.
Lyft and Uber are of course threatening to end service in the metro area once the law takes effect. We’ll see. They made similar threats when New York City, Seattle, and California passed policies intended to improve drivers’ working conditions and/or pay, and yet they still operate there. The companies did bail on Austin back in 2016 rather than comply with requirements they fingerprint, perform background checks and other safety protocol. They returned one year later after the city rolled back the legislation.
Lyft and Uber got Minnesota Governor Tim Walz to veto a statewide bill for better pay and protections last year. Still, some media outlets saw other liberal laws passed and were praising the state as shining example of progressivism and the “best state for workers.”
The actual workers in Minnesota weren’t buying it, and they kept organizing and striking, and continue to do so, as described by Workday Magazine:
Minnesota’s Labor Spring has arrived. Thousands of essential workers and community members are taking part in a Week of Action in the Twin Cities to fight for a host of social demands they hope will build worker power and strengthen communities. They are calling for better union contracts and a labor standards advisory board, alongside social housing, environmental sustainability, and better schools.
The alignment of unions, workers’ centers and community organizations, and the broad scope of their aims, is being heralded as a model of social movement unionism, or bargaining for the common good. The effort, which emanates from more than a decade of organizing and movement building, is uniting under the motto, “What could we win together?”…
Several unions—representing janitors, nurses, retail workers, and educators who have all been working without contracts—are striking or planning to strike, and holding picket lines and rallies at their workplaces, in downtown Minneapolis, and at the state capitol in St. Paul…This kind of cross-sectoral organizing is unique in the United States and has been in the works for more than a decade.
By Max Nesterak, the deputy editor of the Minnesota Reformer who reports on labor and housing. Originally published at the Minnesota Reformer.
Dismissing Uber and Lyft’s threats to leave the city, the Minneapolis City Council voted 10-3 to override a mayoral veto of minimum pay rates for drivers.
The vote on Thursday sets up a six-week standoff between the progressive City Council and two tech giants, with Uber saying it will end service in the entire Twin Cities metro area when the rates take effect on May 1. Lyft says it will end service in Minneapolis when it takes effect.
Driver activists in the council chambers cheered after the vote was called in celebration of a significant victory after three disappointing vetoes in the past year — one by Gov. Tim Walz and two by Mayor Jacob Frey.
“It has been a rough journey… Thank God to the City Council members and all the elected officials who listened to me,” said Eid Ali, president of the Minnesota Uber/Lyft Drivers Association, at a news conference after the vote.
The veto override sends the pitched political conflict back to the state Capitol, where legislators began hearings on a bill this week that would set statewide rates, after Walz vetoed a bill last year.
Both Frey and Walz said they support raising wages for drivers but have been more sensitive to the companies’ warnings that pushing rates too high could backfire and cause demand to sink and the companies to pull up stakes.
Uber released a statement after the vote saying it was “disappointed the council chose to ignore the data and kick Uber out of the Twin Cities, putting 10,000 people out of work and leaving many stranded.”
The ordinance’s supporters on the City Council say the rates they passed — $1.40 per mile and 51 cents per minute — are what’s required to ensure Uber and Lyft drivers are guaranteed the city’s minimum wage of $15.57 an hour after accounting for their expenses.
But those rates are actually higher than what’s required to guarantee drivers the same minimum wage promised to all other workers, according to a massive state analysis of the more than 18 million trips taken in Minnesota in 2022.
That study, the largest of its kind ever conducted, found that drivers would need to be paid 89 cents per mile and 49 cents per minute in order to earn the city’s minimum wage after paying for vehicle expenses and payroll taxes. The study’s authors estimated a higher rate of $1.20 per mile and 49 cents per minute that would allow drivers to be able to earn the minimum wage after paying for comprehensive benefits including health insurance, paid sick leave, paid family and medical leave, retirement savings and unemployment insurance.
The City Council, which chose to pass the ordinance a day before the state study’s release, pointed to the report to bolster their case because it shows drivers earned less than the city minimum wage after accounting for expenses. But they shrugged off the report’s estimates for minimum pay rates.
Those council members pointed to a city report instead. That report used data from Seattle as a model. The city report warns the council of its limitations since it’s not based on “direct unrestricted access to rideshare data” in Minneapolis.
In an interview after the vote, Council President Elliott Payne downplayed the findings of the state report. He said it looks at the seven-county metro and “doesn’t get down to the level of granularity to give a specific factual basis for its number in Minneapolis.”
“Our report is modeled on a framework that is based in Seattle but we use parameters that are city-specific,” Payne said.
The ordinance’s authors — Council Member Robin Wonsley, Jason Chavez, and Jamal Osman — said their decision to override the mayor’s veto showed they chose to stand with workers over corporate interests.
Asked what they would tell drivers if the companies do pull out of the metro area, Wonsley said there are a number of other companies willing to fill their place. Those companies will likely struggle to fill the void left by the two companies, at least in the immediate future, Axios reported.
State lawmakers will now face pressure from the companies to override Minneapolis.
House Majority Leader Jamie Long, DFL-Minneapolis, told the Reformer he doesn’t support preemption, but Walz told Axios he was considering it.
Republican lawmakers announced they would introduce a bill preempting the Minneapolis ordinance on Thursday.
Voting to override the veto were Council Members Wonsley, Chavez, Osman, Payne, Andrea Jenkins, Aisha Chughtai, Jeremiah Ellison, Katie Cashman, Emily Koski and Aurin Chowdhury. Voting against were Council Members Michael Rainville, LaTrisha Vetaw and Linea Palmisano.
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So Uber and Lyft are described as “two tech giants”. Funny, I thought they were two underground taxi companies with apps that can, and have been, developed easily by just about anyone, to replace the dispatch service.
Yes, but first mover advantage has them in the vocabulary. Almost verbs now. Perhaps one day and open source app for towns will be available?
‘Uber and Lyft are trying to crush worker action in the Twin Cities by threatening to exit Minneapolis-St. Paul altogether if they’re required to pay drivers what might amount to a living wage.’
Say, does anybody remember the time that corporations like MacDonalds pulled out of the Russian economy to crush it as they could not be possibly replaced? How did that work out?
https://www.youtube.com/shorts/u6l1Ad1iGjs
If they do not want the Twin Cities’s money, I am sure that there are other organizations that do.
$1.40/mile and $.51/ minute are a decent amount less than what I used to pay when I was a frequent cab rider. That was 30 years ago.
Here’s one for the gig execs who constantly make it clear they’d like to re-institute slavery – 100 Little Curses
By, Felicia…
Social media is abuzz with hot takes on possible outcomes of the veto override here. There likely isn’t a lone entity able to scale up to replace both companies by May 1. There are implications for local and state agencies that are now using those entities to provide transportation for medical and social services. One might expect some pronounced discomfort in the case of both companies withdrawing services. Perhaps some intoxicated folks might have to call a friend or a parent.
The software required to startup a new service is not extraordinarily complex and server space at AWS, for instance, might not be that difficult to acquire. Beyond that, if both companies leave, a ready pool of drivers would eagerly work for any new entity. If such a new enterprise were to prove successful, a new, more beneficial, basis would have been established.
As always, it will be interesting to see whether the lobbying groups for the companies will be able to purchase the votes they desire. A fun possible outcome is if one of the two companies tries to use the deadline to submarine the other and attempt to own the market.
Personally, the only benefit I’ve found of the companies is the ability to track when one’s ride is on the way and having the price be known upfront. Had the taxi companies implemented software to accomplish this, they may have survived.
I honestly expect this to be resolved before the deadline. Neither company wants to give a potential competitor such a large market to become established in.
“There are implications for local and state agencies that are now using those entities to provide transportation for medical and social services.”
And why are government agencies using private companies to provide public transportation to begin with? Someone ran that up the flagpole in my area for “last mile” service – take the bus most of the way and then a car will pick you up at the bus station for the last few blocks. That was met with a resounding “no” from me and a suggestion that maybe people can just walk. So far we’ve been able to fight that bad idea off.
A job is a job is a job until it isn’t…. And if one believes government statistics, there’s plenty of opportunity out there. Let Minnesota’s progressives eat cake.
Lyft and Uber are of course threatening to end service in the metro area once the law takes effect. We’ll see. They made similar
I would note here that the difficult part of ride sharing businesses, the one that required all the venture capital, was to create cadres of drivers and cadres of riders.
Now that the market and the workforce have been created, there are technical solutions see the examples of ATX Cab and the late, and much lamented RideAustin show that the software no longer even needs to be developed
Particularly if you want to set up as a coop or as a non profit, the basic tech is there for the asking.